EAST GREENBUSH, N.Y. — After nearly a decade with a junk bond rating, Rensselaer County's most populous town vaulted into investment-grade bond status Monday, the town announced.
Moody's Investors Service assigned a Aa3 rating for the town's $5.3 million general obligation bond.
The rating "reflects the town's recently improved fiscal controls and healthy financial position including a significant increase in fund balance that was negative within the last five years," Moody's said in assessing the town as a borrowing risk.
"The finances of the town were plagued for almost a decade by fund deficits, interfund borrowing and a failure to audit its financial statements," according to a statement issued by Supervisor Jack Conway, who began his first term in January 2016.
After clearing up its fiscal situation, the town provided an audit of its finances for the past three years leading to the leap in its bond rating. The Town Board and town Comptroller George Phillips performed "careful fiscal planning" and became transparent in financial decisions.
"This is my proudest accomplishment as town supervisor, because it is the result of fundamental changes in the way we do business," Conway said. "It's a huge day. We were hoping for that second A and we got it."
The town is issuing bonds Wednesday to acquire $5.3 million in previous debt from the county sewer district. The county took on that borrowing in 2008 so the town could avoid placing the obligations on its books while it was facing financial problems.
The years 2010 through 2014 were considered impossible to audit, prompting Moody's in 2015 to withdraw from rating the town altogether.
"The rating further incorporates a stable residential tax base with a solid demographic profile, above-average debt and pension liabilities and very slow retirement of debt obligations," Moody's said.
The town anticipates saving $60,000 annually by purchasing the debt at an lower rate than it is currently paying the county, Conway said. Taxpayers will benefit from $1.8 million in interest savings over 30 years, he said.
Moody's said the town could see its rating upgraded again if it reduces its debt and pension liabilities and sees "significant improvements in tax base and wealth and income metrics."
The town's rating could be downgraded if it has a drop in its budget reserves and liquidity or significant increase in debts and pens burdens, Moody's said.
The town's fiscal condition became a campaign issue across several election cycles as first Democrats, then Republicans, and finally the independent East Greenbush First coalition — which includes Conway, a Democrat — took control of Town Hall.
